Small shops warn of mega-chains' invasion

Representatives from 15 Asian countries are cooperating to solve problems arising from an aggressive expansion by retail giants.

At a Bangkok seminar entitled "Asian Forum on Retail Business Competitiveness", representatives shared the view that  traditional small retailers had been destroyed by large modern players.

Asian countries, therefore, must join hands to tackle the problem and ensure the retail giants and small stores are able to compete on an even playing field under the same regulations, the seminar heard.

The 15 nations cooperating in a bid to solve the problem are Japan, South Korea, Hong Kong, Taiwan, Mongolia, the Philippines, Malaysia, Singapore, Indonesia, Brunei, Vietnam, Cambodia, Laos, Burma and Thailand.

The seminar was aimed at finding solutions to the main perceived unfair business practices committed by large retailers. These include unfair bargaining power, price dumping and market monopoly. A retail and wholesale business law is vital in order to control the industry, the event heard.

Internal Trade Department director-general Yangyong Phuangrach said all countries faced the same problem in the retail business.

"Retail giants have expanded rapidly and destroyed traditional retail business in local communities," he said. "Such behaviour has led to market dominance and affected the economy as a wholem since small retailers are a key engine driving the economy in small communities," said Yanyong.

To solve this problem, Yangyong said the Commerce Ministry was revising a draft retail and wholesale business law for proposal to Cabinet approval soon.

According to a report by the Thai Chamber of Commerce, the market share of traditional retail shops in Thailand has fallen from 70 per cent to 30 per cent since 2001. In contrast, the influence of retail giants has increased from 1,821 outlets in 2001 to 6,505 now. Modern retailers enjoy a more than 70-per-cent share of the market.

In addition, the department has received many complaints from manufacturers and suppliers accusing large retailers of forcing them to produce lower-priced goods under a house brand for supply to their outlets. However, the large retailers refused to buy the whole range of their production, which caused huge business losses.

Yangyong said the ministry's trade-competition committee was now investigating such cases, in order to see whether the Trade Competition Act had been breached.